Photograph by Felipe Buitrago
Expert Panel: An alternative energy tax district would remove some of the financial risk of installing home solar panels.
Here Comes The Sun
Santa Cruz ponders tax district for solar power
By Curtis Cartier
SANTA Cruz City Councilmember Mike Rotkin spent $63,000 to outfit his house with solar panels. Using the equity in his home and good credit, he easily qualified for a loan from Santa Cruz Community Credit Union and expects to have it paid off in seven years. Considering his savings in energy costs, Rotkin calls investing in solar energy "a no-brainer." But not everyone has the kind of home equity and credit that qualified him for a solar loan. That may all change soon, however, as Rotkin and his cohorts on the City Council as well as the Santa Cruz County Board of Supervisors are considering developing an "alternative energy district" that could make utilizing solar power as easy as paying property taxes.
The proposed program is based on a similar plan in Berkeley. In it, an outside lender provides solar energy loans that are attached to a property instead a person. This clever maneuver puts a lien on the property until the financing is repaid, and thus eliminates an applicant's equity or credit rating from being needed to qualify. A city using a plan like this would merely have to keep track of who's signed up, and, since the loan is paid back through a special assessment on a homeowner's property tax, would need to provide some accounting work to separate and monitor the monies.
"When the program launched here it sold out in about nine minutes," says Berkeley press liaison Mary Kay Clunies-Ross of the program, dubbed Berkeley FIRST. "It's essentially a program designed for people who want solar but want to pay it off over a longer period of time."
Alternative energy financiers Renewable Funding, LLC teamed up with Berkeley when it launched Berkeley FIRST last November. The company provides the loans and assumes the risk so the city's not left holding the bag. Cisco DeVries, president of Renewable Funding, has also been in talks with Santa Cruz leaders.
"The problem with buying solar sometimes is that it's like purchasing 20 years of electricity up front," he says. "We attach the cost to the property, and that's very unique. We essentially take care of everything and there is no city obligation."
Ross Clark is Santa Cruz's Global Warming Coordinator and has spearheaded the city's work on the alternative energy district project. He hopes that six months from now he'll be signing up eager residents for their first solar panels. He says getting a company like Renewable Funding to cover as much of the costs as possible is key.
"I know we are doing whatever we can to make this program cost-neutral," he says. "It's in everyone's best interest to get it going, though. We're going to need to set up something like this if we want to meet our energy goals of reducing greenhouse gas emissions by 30 percent by 2020."
Not everyone is fully warmed up to the idea of an alternative energy district. Roger DeNault is president of Solar Technologies on Soquel Avenue and one of the most experienced local solar installers in the county. He says that while he supports the idea of an alternative energy district, programs like it sometimes cause customers to hold off buying solar power, believing there are better deals ahead.
"One of our big concerns is that you can create a poorly understood mechanism that seems like a good idea. So you have all these people waiting around for a tax district to be formed instead of buying the solar power they could already qualify for," he says.
Rotkin agrees with DeNault and says anything short of stealing solar panels from a factory is worth the kind of savings that roll in once they're installed. He hopes Santa Cruz can implement the program but says anyone who can get solar power now shouldn't wait another minute.
"If you have the means to get solar, you'd be an idiot not to," says Rotkin. "There's no legal activity that can give you the kind of return that installing solar on your home can."
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